Wataniya aims to raise $50m from IPO

Expansion plans: Wataniya Mobile will sell 38.7 million new shares in an initial public offering on the Palestine Exchange.

Wataniya Mobile, Palestine's second mobile telecommunications operator, plans to raise up to US$50.3 million (Dh184.7m) in an initial public offering (IPO).

Shares will be offered on the Palestine Exchange as early as next week, priced at $1.30 each, Dr Bassam Hannoun, the Wataniya chief executive, said yesterday. Wataniya appointed HSBC Bank Middle East and Arab Bank Group as co-ordinators for the offering.

In all, 38.7 million new shares are to be sold, with existing shareholders maintaining their current shares at the time of the IPO. All proceeds will be used for general business and operational purposes and to assist the funding of the balance of fees payable under Wataniya's operating licence.

Retail investors in Palestine will be able to subscribe at branches of HSBC, Arab Bank, Bank of Palestine, Palestine Commercial Bank, Palestine Islamic Bank, Qatar National Bank, and Quds Bank. Wataniya has an indicative market capitalisation of $335.4m.

PALTEL, Palestine's main telecoms operator, is already publicly listed, with shares floated on both the Abu Dhabi Securities Exchange and the Palestine Exchange.

Three companies have listed on the Palestine Exchange so far this year: Al-Wataniah Towers Company, Palestine Insurance Company, and Ramallah Summer Resorts Company, bringing the total number of listed firms to 41, and its market cap to about $2.5 billion.

Palestine's mobile penetration, at 49 per cent by the end of last year, constitutes one of the lowest rates among regional markets. Jordan's mobile rate was 101 per cent at the same time. The mobile sector is expected to benefit from the country's young demographic. Palestine's population stood at 3.9 million last year and is expected to continue to grow at an annual rate of 3.2 per cent until 2019. About 52 per cent of the population is under the age of 19, the highest proportion in the Middle East. At present Wataniya covers 95 per cent of the Palestinian population in the West Bank, with its main shareholders Qatar Telecom and the Palestine Investment Fund.

The offering by Wataniya Mobile comes as a flurry of investment banking activity recommences in the Gulf region's mobile sector. Saudi Telecom is interested in expanding into Iraq and the rest of the region, said its chief executive, Saud Al Daweesh.

Last week, Nawras, an Omani mobile operator, also majority owned by Qatar Telecom, went public, raising 182m Omani rials for the selling shareholders. Etisalat is yet to begin its due diligence on its bid to buy 46 per cent of Kuwait's Zain, that would also open the doors for Iraq's mobile market. The preliminary offer was made at 1.7 dinars a share, potentially valuing the deal at nearly US$12bn. In the process of the bid, Etisalat and Zain faced a regulatory issue in Saudi Arabia as the prized winner would monopolise three operators in the Kingdom.

Last week, Zain Saudi Arabia's chairman, Prince Hussam Al Saud, said the Kuwaiti operator is in talks with regional and international operators to sell a stake owned by Mobile Telecommunications.